Delhi HC Orders Centre To Pay ₹1.76 Crore For Illegal Occupation Of Private Property For Two Decades, Says Right To Property Is Sacrosanct

Justice Purushaindra Kumar Kaurav emphasized, “Executive overreach beyond the four corners of the law must be met with constitutional censure, for when the protector of rights becomes the violator, the very fabric of the rule of law is imperiled. In a constitutional democracy governed by the principles of justice, equity, and good conscience, the preservation of legal rights such as that of proprietary must remain an unyielding commitment of the State.”

The suit arose from wrongful forfeiture of the Plaintiffs' flat under Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA), based on a revoked detention order from the Emergency era.

The Plaintiffs claimed to be the rightful and legal owners of the suit property and alleged “systematic violation” of their proprietary rights, starting from the period of proclamation of Emergency in 1977.

The Defendant-authorities (Directorate of Estates under the Ministry of Housing & Urban Affairs) on the other hand claimed that the suit property was leased out to them but was later forfeited to the Central Government under Section 7(3) of SAFEMA vide order dated 05.08.1988 passed by the competent authority.

It submitted that as per the provision, upon forfeiture, the suit property vests absolutely in the Central Government free from all encumbrances.

The authority claimed the forfeiture remained in operation until 28.03.2016, when the proceedings under SAFEMA stood closed.

Upon perusing the witness statements and other material placed on record however, the Court Court found that an ex parte forfeiture order was issued against the Plaintiffs, without a hearing.

It also noted that the defendants retained possession of the suit property till 02.07.2020, i.e. seven years after the forfeiture order was quashed.

The High Court thus declared the occupation from 1999 to 2020 unlawful and condemned the State for their continuous possession of the property in question up to 02.07.2020 without paying the rent, in the absence of any bona fide conduct or reasonable explanation.

Right to Property

The Court held that immovable property, for an individual, is not merely a corporeal asset or a physical manifestation of ownership. It observed,

“It constitutes a fundamental pillar of economic security, social identity, and personal dignity. The right to property, though no longer a fundamental right post the 44th Amendment to the Constitution, continues to occupy a sacrosanct position within the democratic framework as a constitutional and legal right under Article 300-A of the Constitution...It is a dynamic constitutional safeguard that strikes a delicate balance between the sovereign power of the State and the proprietary rights of individuals.”

Furthermore, the Court held that public purpose is an indispensable requirement for any legislation that authorizes deprivation of property.

It drew upon the doctrine of eminent domain and held that although Article 300-A of the Constitution does not explicitly incorporate this doctrine, its principles are implicitly embedded within the provision.

“The powers of the State are not plenary or absolute but are circumscribed by constitutional and statutory limitations. Any executive or legislative action that seeks to divest a citizen of property without due process, in the absence of an enabling law, would fall foul of Article 300-A and render such action void ab initio,” the Court said.

Mesne Profit

The Court also allowed the Plaintiffs' claim for grant of mesne profits and based on then prevailing market rates, held they are entitled to the tune of Rs. 1,76,79,550/- with 6% interest .

It held that public interest and the rule of law require that the State be held accountable like any other juristic person when it unlawfully deprives a citizen of property or causes injury through negligence. The bench observed,

“It is well settled that a property owner is entitled to claim compensation for unlawful deprivation of possession of immovable property, and such a remedy is available even in cases where the impugned forfeiture has been held to be without jurisdiction.”

Maintenance charges & tax dues

The Plaintiffs had also sought payment of maintenance charges towards the facilities enjoyed by the Defendant during their unlawful possession.

However, the Court observed that possession of the defendants, not being under a valid lease but as unlawful occupants asserting a claim of title, cannot give rise to any contractual liability for the payment of maintenance charges, in the absence of a fresh legal or contractual arrangement imposing such an obligation.

“Therefore, this Court finds that the plaintiffs are not entitled to the claimed maintenance charges amounting to Rs 9,69,397/-,” it said.

The Plaintiffs had also claimed restitution of property tax on the assertion that the defendants remained in possession of the suit property without payment of rent and, in doing so, unjustly caused the plaintiffs to incur statutory property tax with respect to the suit property.

The Court however declined the relief since the last lease agreement between the parties had expired in 1995 and there was no evidence on record to establish the existence of any valid or subsisting lease that would place such an obligation upon the defendants.

“The continued possession of the defendants, in the absence of a formal lease or document stating that the defendants were to reimburse the property tax, cannot automatically give rise to liability for statutory dues. Moreover, it is a trite principle that property tax is a statutory burden imposed upon the recorded owner of the property, independent of occupancy. The plaintiffs, being the registered owners for municipal purposes, were primarily liable for such dues,” Court said and allowed the suit in part.

Appearance: Mr. Sidhant Kumar, Ms. Manya Chandok and Mr. Om Batra, Advocates for Plaintiffs; Mr. Vikrant N. Goyal, Mr. Nitin Chandra, Mr. Aditya Shukla and Ms. Nishu, Advocates for Defendants

Case title: Rajiv Sarin & Ors. v. Directorate Of Estates & Ors.

Citation: 2025 LiveLaw (Del) 517

Case no.: CS (COMM) 12 of 2021

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